Victoria to Increase Political Donation Caps After High Court Ruling

The cap on political donations in Victoria will increase and will be twice as large for new candidates after the High Court struck out part of the state's electoral act.

Premier Jacinta Allan today announced that donations would now be capped at $7,500 over every four-year term.

But new candidates would be able to fundraise up to $15,000 over the same period from each donor to "get a foothold", Ms Allan said.

Cash Labor receives from the unions as associated entities would remain uncapped, enraging the opposition, however this cannot be used in political campaigns.

All donations from foreign donors will be banned.

"Victoria's elections should be decided by Victorians — not who has the deepest pockets," Ms Allan said in a statement.

"Public funding is core to free and fair elections. We're restoring it."

But Shadow Attorney General James Newbury said the Labor government was "end of days".

"This government is seeking to introduce a set of electoral and donations laws that are rigging the system," he said.

Mr Newbury said it would provide yet more public money for the Labor Party in the middle of a cost-of-living crisis.

"We believe, as a Coalition, that these proposed laws are unconstitutional,"

"The government, at no point, has shown any interest in fixing the constitutional concerns with this bill."

Victoria had no rules governing donations six months out from the state election after the High Court in April found the laws were unconstitutional.

Independent candidates Paul Hopper and Melissa Lowe, who contested the 2022 state election, successfully argued that the laws benefited the major parties by giving them unfettered access to their legacy cash in what is known as "nominated entities".

Donations were otherwise capped at $4,970.

Mr Hopper and Ms Lowe have declared their willingness to return to the High Court if they believe the fix still gives incumbents an unfair advantage.

Under the proposed laws, the Labor, Liberal and National parties will need to refund any cash provided by their nominated entities that was not already spent by April 15, when the High Court judgement was handed down.

The government has in-principle support from the crossbench to pass the legislation through the upper house.

Greens leader Ellen Sandell confirmed the minor party would support the bill's passage to ensure some regime exists but wants to see a more permanent fix after the November election when there will be a review.

She blamed the government for introducing loopholes into the system that allowed the High Court challenge.

"This is a complete mess that Labor has created," Sandell said.

Any donation received during the blackout period will need to be declared under the laws, which are expected to pass parliament this week.

The government had to draw up complex legislation and deal with tricky constitutional questions while negotiating with the opposition and the crossbench.

The Liberal Party had sought a higher donation cap if its access to its nominated entity, the Cormack Foundation, had to be limited.

"Victorians deserve elections that are fair, transparent and free from undue influence," Special Minister of State Ingrid Stitt said.

"These changes make sure the outcome is determined by voters, not by big money."